As jobs and the real estate market in Chicago has steadily rebounded since the deep freeze of the Great Recession, the picture looks a little different for retail properties. While retail vacancies are down since peaking at 12 percent in 2010, the levels have risen and fallen somewhat erratically over the last five years, according to reports from CBRE which Crain’s Chicago Business has highlighted. Latest numbers show that the retail vacancy rate for the Chicago area hit 10 percent in the second quarter of 2017—the fifth time since the recession that area retail vacancies have been at the 10% threshold or higher.
The story is a little more complicated when taking into consideration how different the retail needs are around Chicago and the suburbs. According to CBRE’s numbers, the “City North” area which includes Chicago’s North Side and some downtown neighborhoods, has the area’s lowest retail vacancy at 3.8 percent, Crain’s reports. Meanwhile, the far west suburbs has the area’s highest vacancy rate at 14.3 percent.
However, despite figures that suggest that city neighborhoods are generally outperforming some suburban markets, many Chicago neighborhoods have been witnessing a transformation in terms of retail and small business offerings. Crain’s columnist Greg Hinz highlighted the shuttered storefronts in Lakeview over the weekend. The recent closure of Melrose Restaurant caught many residents by surprise as the classic diner had been a fixture of the community for decades. Elsewhere around the North Side, small business owners have seen rents increase or leases not renewed.
Neighborhoods like Wicker Park and Logan Square have also witnessed dramatic changes in recent years as independent businesses struggle to keep up with the pace of new development and rising costs of operations. Meanwhile in the South Shore, community members and city officials are losing patience with the owners of a shopping center after it has been unable to secure a new full service grocer after the departure of Dominick’s nearly four years ago.
The steady ebb and flow with retail vacancy has caused many smaller developers to leave retail space out of new neighborhood proposals that traditionally would feature commercial space on the first level. The blight of vacant retail has also become a point of contention for residents in areas like Portage Park and Irving Park, but a plan from elected representatives which would crack down on property owners who take advantage of tax relief for retail vacancies appears to have stalled.
- Why are so many stores closing in Chicago? [Crain’s Chicago Business]
- As more stores close, retail vacancies rise again [Crain’s Chicago Business]
- Legislators are looking to crack down on long-vacant storefronts [Curbed Chicago]
- Report: Office Vacancy in Downtown Chicago Hits 15-Year Low [Curbed Chicago]